Biogen Inc.

Good morning, my name is Aisling and I'll be your conference operator today. At this time, I would like to welcome everyone to the Biogen first quarter earnings call and financial update. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star one on your telephone keypad. Please limit yourself to one question to allow other participants time for questions. If you require any further follow-up questions, you may press star 1 again to rejoin the queue. Thank you. I would now like to turn the conference over to Mr. Mike Henke, Director, Investor Relations. Mr. Henke, you may begin your conference.

Good morning, and welcome to Biogen's first quarter 2021 earnings call. Before we begin, I encourage everyone to go to the Investors section of Biogen.com to find the earnings release and related financial tables. including our GAAP financial measures and a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 1 and 2, and Table 4 includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call. I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. On today's call, I am joined by our Chief Executive Officer, Michelle Vounatsos, Dr. Al Sandrock, Head of Research and Development, and our CFO, Mike McDonald. As a reminder, during the Q&A portion of the call, we kindly ask that you limit yourself to one question. I will now turn the call over to Michel.

Good morning, everyone, and thank you for joining us. With a strong focus on operational execution, we have continued to serve patients and advance our strategic priorities. While we know that 2021 will be a financial reset year for the company, we are pleased with our operational performance during Q1 with first quarter total revenues of $2.7 billion and first quarter non-GAAP EPS of $5.34. These results were driven by solid performance across MS, SMA, and biosimilars, together with continued strong cost management. We are ready to launch Aducanumab in the U.S. should we receive the regulatory approval. and we anticipate an FDA decision by the June 7th PERDUFA date. If approved, aducanumab will be the first therapy to meaningfully change the course of Alzheimer's disease and will represent a significant growth and value creation opportunity. Our cross-functional team in the US has been working for months in preparation for the potential launch of aducanumab. We have identified and evaluated key sites of care that have the necessary infrastructure for Alzheimer's patients. We believe that more than 600 of these sites will be ready to treat patients shortly after a potential approval. Our team is currently working to evaluate the capacity at these and other sites to absorb an influx of Alzheimer's patients. Together with SI, we were pleased to support us against Alzheimer's in the development of Brain Guide, a platform which is powered by Amazon Web Services. Brain Guide aims to increase brain health awareness and empower people to take action based upon responses to a memory questionnaire. We hope that Brain Guide, along with our collaboration with Apple, aiming to identify digital biomarkers of cognitive health will enable people to seek care sooner in order to maximize the benefits of treatment. We are also working to ensure an equitable launch to facilitate broad access to aducanumab should it be approved, including underserved population, a critical issue that has been highlighted by the COVID-19 pandemic. I am pleased to announce that outside the US, we recently submitted additional regulatory filings in Brazil, Canada, Switzerland, and Australia, adding to our earlier submissions in Europe and Japan. Turning to our progress towards our strategic priorities. First, Q1 overall MS revenue, including Ocrevus royalties, was $1.7 billion. Putting aside the entry of Tefidera Generic in the US, Our broader MS business continues to demonstrate resilience and progress. Excluding TECFIDERA and BUS, the number of patients on our MS products worldwide increased approximately 5% versus the prior year. Importantly, in the current COVID-19 environment, we believe our MS products are well positioned versus the competition based on our current treatment guidelines. We were very pleased to see strong revenue growth for Vimerity. which is now the number one oral MS product in terms of new prescription in the US. We believe this performance is a testament to a strong product profile and our team's ability to execute well. Validating our plan announced mid last year to accelerate the launch of Humerity. We are also excited that Tecfidera recently received a regulatory approval in China. Furthermore, we continue to advance new approaches to help address the remaining unmet medical need in MS. This quarter, we launch an intramuscular formulation of Plegreti in both the US and EU, which we believe offers an improved tolerability profile and we obtain approval for subcutaneous administration of Tysabri in the EU with the first expected launch in Germany while we await a regulatory decision in the US. We also continue to advance the potential use of extended interval dosing for Tysabri with important data expected in the middle of this year. Second, Spinraza generated first quarter global revenues of $521 million. While Spinraza is facing competition in the US, which has been exacerbated by the impacts of COVID-19, we were encouraged to see that Spinraza discontinuation decreased versus Q4 of last year. Outside the U.S., Spinraza continued to perform very well with 13% revenue growth versus Q1 of last year. Overall, Spinraza remains the market-leading treatment for SMA, and we believe it will remain a foundation of care. Third, our biosimilar business delivered revenue of $205 million. We are pleased with this performance as the continued impact of the COVID-19 pandemic has resulted in a slowdown in new treatment starts and reduced clinic capacity for immunology patients in Europe. We aim to continue to grow our biosimilar business and create additional financial headroom for innovation by launching new products. To that end, We recently announced a collaboration with BioTerra Solutions to develop and commercialize BAT1806, a proposed biosimilar referencing Actimera, currently in Phase III development. Biogen will have the right to commercialize BAT1806 globally in countries outside of China, which will expand our global biosimilar footprint. Fourth, this quarter we continue to meaningfully progress on our pipeline. We reported phase two data in essential tremor, and we expect seven additional mid to late stage readouts this year. Gene therapy represents a key area of focus for Biogen as we continue to pursue multiple modalities. To this end, we recently announced our plan to build a new state-of-the-art gene therapy manufacturing facility at our RTP site in North Carolina. Our cash flow generation remains strong and continues to provide us with significant flexibility to allocate capital. In Q1, we generated approximately $769 million in cash flow from operations and $676 million in free cash flow. As we have demonstrated in the past, we are committed to maximizing returns for our shareholders as we aim to bring innovative therapies to patients. I will now turn the call over to Al for a more detailed update on our recent progress in R&D.